Public-sector workers earning as little as £30,000 face new tax bills on their
pensions if the Chancellor cuts the annual allowance in the Autumn
Statement, experts have calculated.

Middle-income employees with "gold plated" final salary pensions, which are still common in the public sector, could be charged tax on their pension if they have long service and receive a 10pc pay rise after being promoted, for example.

Those earning £50,000 with long service could be taxed when they receive only a moderate pay rise above inflation if they make additional voluntary contributions to their pension.

Those with shorter service can earn more before they face the tax charge.

The accompanying tables, compiled by pensions experts at Hymans Robertson, the actuary, shows how workers are affected at various salary levels and with different lengths of service if the Chancellor cuts the annual allowance to £30,000 in his Autumn Statement 2012.

In the green sectors of the charts, employees are safe from the tax. Those in the red zone face paying the tax, while anyone in the orange section could be taxed if they make additional voluntary contributions. Charts have been compiled for pay rises of 5pc and 10pc; inflation is assumed to be 2pc.

The tax charge is based on the value of the notional fund that would be needed to pay your eventual pension, irrespective of your actual contributions. Because your pension entitlement rises for each year of membership of a final salary scheme, the value of this "fund" also rises every year.

For example, our charts assume that workers earn an extra pension income of a 60th of their final salary for each year worked

The rise in value of your "fund" is bigger if you receive a pay rise. Under the tax rules, the "fund" is worth 16 times the income you are entitled to. If the value of the fund, calculated on this basis, exceeds the value a year previously by more than the annual tax-free allowance (after an allowance for inflation) (after an allowance for inflation), you have to pay tax on the excess.

Currently, any increase of up to £50,000 over the tax year is exempt from tax, but there has been intense speculation that the Chancellor will cut this limit to £30,000, or possibly £40,000, in the Autumn Statement. Here are links to the tables for a cut to £40,000

The increase in value of the fund is added to your income for tax purposes, so you pay the pensions element at your highest rate. The increase in the value of your pension could even take you into a higher tax bracket altogether.

Currently, employees can also carry over three years' unused annual tax allowances.

If you are hit with a tax bill, you may have the option of paying it from your pension rather than from your pocket. But working out which is the better option is complicated.

"For final salary members, paying the tax directly or through the fund is a complex decision," said Chris Noon, a partner at Hymans Robertson. "Generally, if the rate at which the trustees convert pension into cash to pay the tax is neutral, paying the tax through the fund is usually a better option.

"However, these 'commutation' terms are typically poor value, meaning that additional thought is required in considering which option to take."